The Indian electric vehicle industry appears to be the hot one in the Indian automotive industry, with both established and up-and-coming EV manufacturers entering it with vigour.
This is the case even though the Chennai-based conglomerate Murugappa group, which had previously started and stopped producing and selling electric two-wheelers through BSA Motors, has now returned to the EV market.
The debut of its electric passenger three-wheelers has been announced by the group’s flagship company, Tube Investments of India Ltd, through its subsidiary TI Clean Mobility. Additionally, the business has made known that it will introduce electric tractors and trucks.
Can the EV market in India be referred to as Version 2.0? A decade ago, manufacturers of electric scooters were assembling foreign kits. Like it is now, government subsidies dominated the sector back then.
Government subsidies continue to fuel the sector, and the nation still depends on imports for items like rare earth magnets and lithium-ion batteries.
The difference today is that two-wheelers—scooters and motorcycles—are faster and have longer ranges between charges, and manufacturers are also releasing electric three- and four-wheelers and buses.
On the Version 2.0 of the Indian Electric Vehicle Industry question, though, industry experts are divided.
When compared to ten years ago, the sector has seen a significant transformation. There are currently businesses that produce lithium-ion cells/batteries, motors, controllers, and other things outside vehicles. In India, automobiles are currently being designed. The possibilities were few ten years ago, but they are now numerous.
In the past, only residences could charge electric two-wheelers. Now that multiple firms have entered the market, the infrastructure for charging is emerging.
But one constant thing is that the industry continues to be supported by subsidies. Without the government subsidy, it will be difficult for the players to convince a potential customer of electric vehicles to
Some of the budget requests from the manufacturers of electric vehicles include the expansion of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India – II (FAME II) subsidy scheme and the rationalization of GST.
The study indicates that the manufacturers of electric vehicles want the FAME II subsidy program to be prolonged past March 2024 and expanded to include commercial vehicles. It will be crucial for the government to continue supporting the adoption of electric vehicles after the momentum seen in 2022 in the fort to pass the tipping point and the momentum to continue.
First, the adoption will be substantially aided by the maintenance of the FAME II subsidy or the introduction of a FAME III subsidy. If this subsidy were to be abruptly stopped in 2024, the market would experience a demand shock.
According to the CARE Ratings study, the manufacturers want the production-linked incentive (PLI) program to include small, medium, and start-up companies who contribute to the electric car ecosystem as well as the lowest possible tax rates for electric vehicles. Narayanan contends that India can compete on a global scale and that the export market for electric vehicles may soon grow.
It is advised that until local capacity is developed, duties for goods that must inevitably be imported be eliminated. China will have a cost edge over India in international markets without this. A PLI benefit expansion to include SKD/CKD assemblies, as well as complete cars, would also be highly advantageous.
Since 2017–18, 18,41,622 EVs have been sold in India, according to the SMEV.
- With 874,993 units and 897,792 units, respectively, two-wheelers and three-wheelers made up the majority of the sales.
- 65,494 four-wheelers and 3,343 buses made up the total. According to industry observers, the sector is in a state of flux with sales increasing due to incentives, decreasing due to EVs catching fire, and then increasing once more.
The states have just raised their electricity rates, which will reduce the financial advantage of purchasing an EV over an oil-powered vehicle. Additionally, there would be no compelling motive for a buyer to choose an EV without the subsidy.
Another intriguing problem is that, while rapid charging is accessible for four-wheelers, it is not for two-wheelers, which account for the majority of sales.
The initial and ongoing costs of the car will decrease if battery switching is accepted because owners will only be charged for the battery power used.
According to a presentation made by the SMEV to a parliamentary committee, with the right regulations, 80% of two-wheelers might be electric by FY30. The SMEV added that after FY27, the subsidies could be gradually reduced because the momentum would be sufficient to maintain growth.
Content Credit: Economic Times